A macro-stabilization function for the Euro area
This chapter explores an institutional challenge still facing the European Monetary Union (EMU) after the Eurozone sovereign debt crisis. One of these is the absence of a centralized macroeconomic stabilization function to deal with possible asymmetrical shocks, in addition to the common monetary po...
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| Veröffentlicht in: | Economic globalization and governance |
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| Format: | UnknownFormat |
| Sprache: | eng |
| Veröffentlicht: |
2021
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Tag hinzufügen | Zusammenfassung: | This chapter explores an institutional challenge still facing the European Monetary Union (EMU) after the Eurozone sovereign debt crisis. One of these is the absence of a centralized macroeconomic stabilization function to deal with possible asymmetrical shocks, in addition to the common monetary policy. Indeed, the EMU remains highly vulnerable to shocks without some fiscal risk sharing. To be sure, a centralized fiscal stabilization implies a common budget and, hence, some risk sharing. However, it also makes future economic crises less likely and relieves the pressure on the common monetary policy, among other advantages. While the European Union (EU) technical debate recognizes this desideratum, the same cannot be said for the political debate across EU Member States. However, history has taught us that EU leaders act decisively when confronted with a crisis. Thus, the next recession may see them accept and establish a macro-stabilization function for the Euro area. |
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| ISBN: | 9783030532642 |